Former First National Bank Employee Sentenced to 18 Months for Embezzling $559,000 from an Elderly Bank Customer
|U.S. Attorney’s Office September 12, 2013|
FORT SMITH, AR—Conner Eldridge, United States Attorney for the Western District of Arkansas, announced today that Mary Kay Newman, 45, of Fort Smith, Arkansas, was sentenced to 18 months’ imprisonment, two years of supervised release, ordered to pay a $2,500 fine, and $9,260.23 in restitution for embezzling $559,000 from an elderly bank customer. The sentencing took place before the Honorable P. K. Holmes, III in the United States District Court for the Western District of Arkansas.
U.S. Attorney Eldridge commented, “Not only did the defendant abuse her position of trust, but she also preyed upon one of the most vulnerable members of our community—an elderly widow—in a scheme devised for the sole purpose of benefiting herself. With the hard work of the FBI and this office, this individual has been held accountable, and a statement has been made that those who swindle the elderly and others out of money will be brought to justice.”
“The fact that Ms. Newman took advantage of her elderly customer by stealing from her during the most vulnerable times in her life—after she had lost her spouse and while she was hospitalized—represents greed at its worst,” stated FBI Special Agent in Charge Randall C. Coleman. “I commend the agents and prosecutors whose hard work resulted in Ms. Newman being held accountable for her actions.”
According to court records, Newman was an employee of First National Bank in Fort Smith, Arkansas, from 1989 until December 29, 2011. Ruby Pharis, who was approximately 89 years old on the date of the offense, banked at the Phoenix Village location and became acquainted with Newman. In September 2002, Mrs. Pharis’s husband died, and she continued to regularly come in contact with Newman. In 2009, Mrs. Pharis purchased two certificates of deposit at Chambers Bank in Fort Smith that had the combined value of $530,189.90. On January 12, 2010, she renewed those certificates, which at that time had a combined value of $548,719.47.
In 2010, Mrs. Pharis required surgery and hospitalization, and Newman advised her that it was necessary for her to sign a power of attorney to Newman so that her bills could be paid while she was incapacitated. Mrs. Pharis did not give Newman authority to make any other financial decisions. Beginning in January 2011, Newman then proceeded to structure several financial transactions without Mrs. Pharis’s knowledge for the purpose of obtaining funds for her personal use. On January 19, 2011, Newman converted the certificates of deposit into six cashier’s checks. On January 20, Newman cashed two cashier’s checks at First National Bank in the total amount of $159,99.27. On January 21, Newman converted the remaining checks into two certificates of deposit at Chambers Bank in the name of Mrs. Pharis. On March 21, Newman converted one certificate of deposit into a cashier’s check worth, after an early withdrawal penalty, $99,637.50, which she then cashed at First National Bank. On June 27, Newman converted the second certificate of deposit for a cashier’s check worth, after an early withdrawal fee, $299,985.10. She then deposited this check into a savings account that she had opened at First National Bank in Mrs. Pharis’s name. Newman then withdrew $60,000 from this account. On November 9, Newman purchased a cashier’s check in the amount of $25,000 from First National Bank made payable to Mrs. Pharis and Mary Kay Newman. On the same day, she converted that check into a cashier’s check made payable to her alone at another branch of First National Bank. Newman deposited that check into her personal bank account at the Arkansas Federal Credit Union.
In late December 2011, Mrs. Pharis became concerned that she was not receiving her account statements from First National Bank. After an examination of her accounts, First National Bank discovered the transactions made by Newman, and she was terminated from employment on December 29, 2011.
Newman formally waived indictment and pleaded guilty to a one-count information on March 19, 2013.
This case was investigated by FBI Special Agent Timmy Akins. Assistant United States Attorney Kyra Jenner prosecuted the case for the United States.